Tesla’s first mass-market electric

Tesla will complete production of its very first Model 3 vehicle today. It won’t be the only mass-market, all-electric, 200-mile sedan on the market — GM grabbed first-mover status in December, when it began selling its 238-mile Chevy Bolt. But the Model 3 will nonetheless be singular: Not only will the car be sleek and desirably cool, but it will be equipped with self-driving hardware — one more perk that has motivated 400,000 people to put down $1,000 apiece to reserve one.

All of which is to say that, of the dozens of electrics to reach the global market in the coming five or so years, the Model 3 probably stands the best chance of popularizing a new mass-market electric car age. Rappers are penning verses about no other electric.

A level deeper: Rarely has a piece of commercial transportation been so anticipated — perhaps the Concorde super-sonic airliner in the 1970s. And a big reason has been the long buildup: In 2006, Tesla CEO Elon Musk set out his “master plan” to single-handedly usher in an electric car industry. No one knows how many Model 3s Musk will eventually sell. But today, fearful that Tesla will render them like once-powerful Nokia — sad industrial relics — virtually every major carmaker in the world plans to field multiple electric cars in case the Model 3 is a viral success.

Musk plans to actually deliver his first cars to customers starting July 28, and to begin a slow buildup of production until he is making 500,000 cars a year in 2018 and 1 million in 2020. The base model will cost $35,000 before rebates, go 215 miles on a charge, and accelerate from 0 mph to 60 mph in fewer than 6 seconds.

But no one believes Musk will deliver cars at that pace. And for that and other reasons, Tesla’s share price has been ravaged over the last ten days, losing nearly 20% of its value, half of it in the last two days alone. All in all, Tesla is having one of its worst stretches since its IPO seven years ago.

Tesla reported this week that it delivered fewer vehicles in the second quarter than it had promised, leading analysts like Goldman Sachs’ David Tamberrino to conclude that demand for high-end Teslas — the premium S and the X SUV — has already plateaued.

KeyBanc’s Brad Erickson also questions just how profitable the Model 3 will be when mass production is in full swing. He argues that Tesla must reduce its cost by 66% through expanded scale and manufacturing innovation to hit its profit targets — a tall order even for Musk.

Meanwhile competition is on Tesla’s heels: Volvo this week announced that it will stop introducing new combustion-engine only vehicles next year. And Baidu partnered with chip maker Nvidia to accelerate the launch of fully autonomous cars, releasing open source software that will bring even more competition to the space.

The bottom line: Musk and Tesla have reached a rare pantheon of cultural phenomenons, capturing hearts and imaginations like no modern tech figure apart from Steve Jobs and Apple. But carmakers around the world are intent on beating Tesla to both electric and autonomous cars. That is what he has said he wanted — to create an electric car industry. Now, he will have to show he can beat back the competition.

This article is ridiculous hopium. With about 1.2 billion gas and diesel cars to replace. If 50,000 are sold next year, well you do the math.

onlooker on Fri, 7th Jul 2017 8:33 am

These changes to the Economy are no longer feasible nor will they drastically change the trajectory that we have ended up on of creating an inhospitable planet for way too many people. But Nature will put us back into balance

50,000 x 20 = 1,000,000 so in twenty years we can expect to replace one million cars with EV technology.

Kenz300 on Fri, 7th Jul 2017 3:41 pm

Every major auto maker is now developing an all electric vehicle plan and all will be introducing all electric cars over the next two or three years. The change to electric will happen.
Safer, cleaner, faster, cheaper, no emissions, no noise, no gas, no oil changes, less overall maintenance and always leave home in the morning with a full charge.

China is a worlds largest auto market and they are mandating all electric vehicles in growing percentages every year. Every auto maker is working to comply.

MASTERMIND on Fri, 7th Jul 2017 4:25 pm

Tesla and EV’s are doomed in America. There are only around 58 million garages for around 250 million vehicles.

Outcast_Searcher on Fri, 7th Jul 2017 9:04 pm

Dave Thompson, you are apparently innumerate.

In two different posts, you say 50,000 vehicles instead of 500,000. They’re already making over 25,000 a quarter, so claiming 50,000 a year is ridiculous.

And a million by 2020. So can you do the math on how many cars a million a year is in 20 years?

Now add all the competition in 2020 to that.

It’s not like that will replace all ICE’s or even close — but it’s an excellent start.

Davy on Sat, 8th Jul 2017 5:47 am

I see a strong potential for EV’s developing. They are vital to our effort to diversify our transportation needs away from fossil fuels. If we can build up alternative as their fuel source then they will be cleaner. Currently they run on fossil fuels for the most part. I don’t see the clean in a fossil fuel grid supplying energy to EV’s. Currently they are marginally affordable and mainly a feel good of the wealthy and fake greens. They are not clean in their manufacture. Projecting a quantity of manufacture based upon yet to be proven trends is just speculation. Will there be an economy to produce these expensive vehicles at the level we see many claiming? Those proponents of EV’s claim huge increases are at hand. While I see a chance of this happening I would only be cautiously optimistic. EV’’s as a transition technology is a long way from reality. A robust global economy is far from assured. I find all techno optimist on this board default to a habituated view of the economy growing at a 2-3% rate. How long is this type of growth possible? A correction used to be normal. The reality is correction are natural and necessary because everything in life cycles. The bigger issue is have we gone through an economic door of doom with what has happened since 08? EV may have a bright future but we should not dismiss the storm clouds and we should not assume they are clean now.

dave thompson on Sat, 8th Jul 2017 9:02 am

Outcast the article numbers of the Tesla cars is what I was referring to. Either way driving an electric car is not going to make any dif.

dave thompson on Sat, 8th Jul 2017 9:08 am

Outcast yes 500,000 is the number, by the way, innumerate or not I still contend driving an EV is not going to lesson the amount of ff burned. And replacing the worlds rolling fleet of private transport w/EV’s ain’t happening. “Look up when trucks stop rolling.”